Simons CEO Peter Simons on the new department-store wars

“We’re trying to hold on to this belief in creativity and architecture and art”

 
Simons CEO Peter Simons.
Simons CEO Peter Simons.

The CEO of Simons recently confirmed plans for six new stores across canada. He explains why, after nearly two centuries of business in Quebec, it is time to grow.


 

Simons has been in business for more than 175 years—longer than this country has existed!—but, until recently, only in Quebec. Now you’ve got one store in Edmonton and plans to expand across Canada, along with Holt Renfrew, Harry Rosen, Nordstrom and Saks Fifth Avenue. How do you differentiate the Simons brand from other higher-end retailers?

We’re a large-scale specialty fashion boutique—mid- to high-end—and we offer a unique mix of exclusive merchandise designed here in Canada, as well as high-end brands like Paul Smith. What’s unique is how we bring this assortment together—customers can mix and match at a lot of different price points to create their own looks. And customer service is also a key to the business. It’s the one differentiating factor between the store and the e-commerce environment. I just have to believe it’s going to remain that way as the novelty of technology wears off.

That sounds a lot like how Nordstrom describes itself.

Maybe. We’ve got more exclusive brands. But sure, it’s a competitive marketplace, and we’re all working the same market. A big difference is that we’re local, and I think we’re coming to a point where a conversation is starting—and it’s going to be a long conversation—about the role of companies in the communities where they work and their responsibilities to those communities. We’re seeing a growing number of what I call supra-national firms that want to do business everywhere in the world but don’t want to have responsibility anywhere. There’s going to be a backlash, eventually, against companies that want to operate here but don’t want any responsibility for how we run our society and how we finance our values.

So is your Canadianness a key differentiator?

I’m not a nationalist, and I believe what we do has to be world-class. But these are important issues, and everyone’s got to start thinking about how we’re going to build the country we want to build. You see these companies in the press bragging about how they only pay 3% in global taxes. Well, I think it’s time we start asking ourselves some hard questions. Like, how is your mother going to get her health care tomorrow? Who’s going to pay for your children’s education? And how are we going to remove inequality in our society? If you haven’t read Thomas Piketty’s Capital in the Twenty-First Century, if you haven’t read The Zero Marginal Cost Society [Jeremy Rifkin’s account of how extreme gains in productivity are disrupting capitalism by rendering many goods and services almost free], you cannot even have a conversation with me about what the future is holding. You’re living in a la-la land. Those books are big, heavy reads, full of incredibly scary and complex ideas, but they’re full of hope and potential for an incredibly changed but better world. I’m not left or right—these aren’t left or right issues. These are global issues, and I don’t think we’re talking about them enough right now. But customers are pretty savvy. I think they’re going to wake up and start making choices.

You’ve been talking about building stores outside Quebec for at least 10 years, but you only opened your first one—at the West Edmonton Mall—in 2012. Your second, in Vancouver, launches this fall, and you have plans for five more by 2017. Why has the rollout taken so long?

Well, first of all, these are big stores we’re building: 80,000 to 100,000 square feet. And we’re aiming for each store to be unique—they’re destination locations. We’re not trying to replicate the look of a chain. We’re seeing a lot of cookie-cutter cheap buildings going up these days. Well, you have to ask yourself, what will our cities look like in 50 years? There are mornings when I wake up and look around, and I wouldn’t know whether I was in Toronto or Milan or London: Everything looks identical. We’re trying to hold on to this belief in creativity and architecture and art. We’re working with Doug Coupland, for instance, on an art piece in Vancouver, and we try to do that with all the stores we build. Our store in Montreal has a work by [late Montreal artist] Guido Molinari.

How are you choosing your locations? Was there something about the West Edmonton Mall or its developers, the Ghermezian family, that attracted you to that first location?

We’re a family business, and my brother [Richard Simons] and I tend to gravitate toward relationships with entrepreneurs who understand what we want to do. That seems to make a difference for us. Don [Ghermezian] believed in what we were trying to do. Sometimes when a partnership is more financial, like with the pension-fund operated owners…sometimes there are people who don’t quite get what you want to do or the creative choices you want to make.

How big do you think you can grow?

We’ll probably top out at around 20 stores. We’re not Starbucks—there will be a limit to how many stores we build. And this is a pretty big leap for us. We’re not trying to become a big company. But in terms of engaging designers on exclusivity, in terms of creativity, and to defend against the influx of global retailers, we needed to have a little bit more size. The web business also requires scale, to a certain extent.

You’re doing a lot of things to appeal to younger shoppers, like installing photo booths on the shopping floor and fitting rooms that descend from the ceiling. You’re also focusing on sub-brands like Twik and Djab that cater to young women and men respectively. Are they the focus of your expansion efforts?

There’s been a lot of talk about what we’re doing for the junior shopper, and I think maybe that the Twik market is looking for a more exciting experience on the shopping floor, but we’ve got a number of sub-brands and a lot of customers looking for different things. The tailored men’s business is appreciating a little more sophisticated, less theatrical environment. They’re more focused on service. So we’re experimenting with a lot of things, trying to explore with our customers—what they relate to, what they’re looking for.

How did you come up with those names? Twik and Djab sound almost like IKEA products.

We really believe in the power of words—language as an art form. Twik is a nice word. It had a lot of 1960s Carnaby Street associations: with [British designer] Mary Quant; with Twiggy, the model. And Djab…it’s simple, it has a bit of an aggressive, masculine feel to it, maybe in an onomatopoeic way. We try to look around for inspiration with these things.

You’ve remained a merchandise manager while also running the company. Why is that important to you?

You have to hold on to things that are great about your business, because otherwise you can get sucked into the necessity of accounting and IT and all kinds of other things. I’m now overseeing our Twik department, and I really like being in touch with the product and the fashion, and I love having the contact with young buyers and the market. You have to stay connected with that creative side as much as you can. If you lose that, then you’ve lost an important part of your business.

Are you wearing anything from Simons right now?

I’m wearing a Tiger suit, an exclusive Simons tie made in Italy and a shirt made in Canada. And my underwear is actually from Simons also. I won’t go into any more detail about that for now.

Would you ever consider going public?

I think about going public, or maybe a partnership, but we’re entering into a very high-risk, demanding phase of the company’s development, and strategically I think being private will allow us to make some good long-term choices. And the right long-term choices. My brother and I have our name on the door. So I think maybe we look at things a little differently. We’ve made some choices about salaries and benefits—offering a full pension plan and medical benefits, for instance—that are in everyone’s interests. Being private means we can be of service to our suppliers, to our communities and to the people we work with. But, that said, I can’t say we’ll never sell.

Another popular Quebec chain, Les Ailes de la Mode, announced ambitious plans for a Canada-wide expansion about 15 years ago, but the endeavour quickly flamed out. Why do you think your experience will be different?

Boy, to say there’s no risk is folly: It’s definitely a very competitive, dynamic market, with a new equilibrium forming between electronic sales and bricks-and-mortar. My brother and I can feel the risk we’re taking—it’s our money we’re putting down, and we’re doing some really heavy entrepreneurial lifting. But we’re in this for the long-term, and we’re going to stay humble and continue to learn and develop. I’m hoping it’ll all come together.

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